Opaque mortgage, buffers, and real EIR

[Snugs08]

Jesus Thailand mortgages are opaque if you want to really want to understand the figures.

 

So the banks base your repayments with theoretical interest buffer included, this is somewhat sane idea although its advertised nowhere, note though imo the MMR are probably a high point right now,  it ranges from +0.75% to 1% across the four banks we've tested, and god help you if try to ask the bank staff about this. It's reverse engineering if you can even get an amortization schedule off them.

 

Once I understood the bank buffer I was getting closer to fully understanding and generating my own amortization schedules thai-style however the example amortization examples have used the advertise EIR+buffer to calculate the monthly interest with the reduce term which is odd (i.e. you should finish your mortgage early if MMR doesnt go up, if it does go up by % of the buffer you finish at the plan term - 360months in our case).   This cake-and-eat-it calc has happened on two banks on two unrelated quotes (i.e not via same broker)

 

E.g. Let's say a 4.5million mortgage with 4.35% EIR for months 1-36 with a 27500 monthly payment.

 

I would expect on Month 1 the breakdown to be:

Interest: 16312

Principal: 11187.5

The amortization scenario we have been given though is based on +1%, so   Month 1: Interest: 20063 Principal 7438   Okay, so bear with me, you could say that this highlight <deleted> hits the fan scenario of an MMR growing + 1% and this would finish the mortgage at 360months, however the amort sch has this at 337 - if this went to 360 I would understand and if the non-existent 16312/11187 went to 337 then all would make logical sense.   The amort sch they have given me seem to be for a >1% deviation of current MMR. 337month term, with start at 1%.   Unless you starting paying the mortgage and you pay less than the amort schedule ?   Anyone broken down before and got within a few baht in their comparison (ignore rounding rules)?

Edited March 7, 2023 by Snugs08